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Saturday, September 27, 2014

When Warren Buffett
started his investing career, he would read 600, 750, or 1,000 pages a day.Even now, he still
spends about 80% of his day reading."Look, my job is
essentially just corralling more and more and more facts and information, and
occasionally seeing whether that leads to some action," he once said in an
interview."We don't read
other people's opinions, “he says. "We want to get the facts, and then
think."To help you get into
the mind of the billionaire investor, we've rounded up his book recommendations
over 20 years of interviews and shareholder letters.

1."THE INTELLIGENT INVESTOR " by Benjamin Graham

When Buffett was 19
years old, he picked up a copy of legendary Wall Streeter Benjamin Graham's
"Intelligent Investor."It was the one of the
luckiest moments of his life, he said, since it gave him the intellectual
framework for investing."To invest successfully
over a lifetime does not require a stratospheric IQ, unusual business insights,
or inside information," Buffett said. "What's needed is a sound
intellectual framework for making decisions and the ability to keep emotions
from corroding that framework. This book precisely and clearly prescribes the
proper framework. You must provide the emotional discipline."

2."SECURITY ANALYSIS" by Benjamin Graham

Another
groundbreaking work of Graham's, Buffett said that "Security
Analysis" has given him "a road map for investing that I have now
been following for 57 years."

The book's core
insight: If you do a thorough enough of analysis, you can figure out the value
of a company — and if the market knows the same.Buffett has said that
Graham was the second most influential figure in his life, only after his
father."Ben was this
incredible teacher, I mean he was a natural," he said.

3."COMMON STOCKS AND UNCOMMON PROFITS" by Philip Fisher

While investor Philip
Fisher — who specialized in investing in innovative companies — didn't shape
Buffett in quite the same way as Graham did, he still holds him in the highest
regard.

"I am an eager
reader of whatever Phil has to say, and I recommend him to you," Buffett
said.In "Common
Stocks and Uncommon Profits," Fisher emphasizes that fixating on financial
statements isn't enough — you also need to evaluate a company's management.

4."STRESS TEST : REFLECTIONS ON FINANCIAL CRISES" by Tim Geithner

Buffett says that the
former Secretary of the Treasury's book about the financial crisis is a
must-read for any manager.

Lots of books have
been written about how to manage an organization through tough times. Almost
none are firsthand accounts of steering a wing of government through economic
catastrophe.

"This wasn't
just a little problem on the fringes of the U.S. mortgage market,"
Geithner writes. "I had a sick feeling in my stomach. I knew what
financial crises felt like, and they felt like this."

5. "THE ESSAYS OF WARREN BUFFETT"

If you want to get to
know the way Buffett thinks, go straight to the Sage himself.

In this collection,
he keeps it very real — in his signature folksy-intellectual fashion.

"What could be
more advantageous in an intellectual contest — whether it be chess, bridge, or
stock selection —than to have opponents who have been taught that thinking is a
waste of energy?" he asks.

6.
"JACK :STRAIGHT FROM THE GUT " by Jack Welch

In his 2001
shareholder letter, Buffett gleefully endorses "Jack: Straight From The
Gut," a business memoir of longtime GE exec Jack Welch, who Buffett
describes as "smart, energetic, hands-on."In commenting on the
book, BloombergBusinessweek wrote that "Welch has had such an impact on
modern business that a tour of his personal history offers all managers
valuable lessons."

Buffett's advice:
"Get a copy!"

7. "THE OUTSIDERS" by William Thorndike, Jr.

In his 2012
shareholder letter Buffett praises "Outsiders" as "an
outstanding book about CEOs who excelled at capital allocation."Berkshire Hathaway
plays a major role in the book. One chapter is on director Tom Murphy, who
Buffett says is "overall the best business manager I’ve ever met."The book — which
finds patterns of success from execs at the Washington Post, Ralston Purina, and
others — has been praised as "one of the most important business books in
America" by Forbes.

8."THE CLASH OF THE CULTURES " by John Bogle

Bogle's "The
Clash of the Cultures" is another recommendation from the 2012 shareholder
letter.In it, Bogle —
creator of the index fund and founder of the Vanguard Group, now managing $2.0
trillion in assets — argues that long-term investing has been crowded out by
short-term speculation.But the book isn't
all argument. It finishes with practical tips, like:

a)
Remember reversion to the mean. What's hot today isn't likely to be hot tomorrow.
The stock market reverts to fundamental returns over the long run. Don't follow
the herd.

b)
Time is your friend, impulse is your enemy. Take advantage of compound interest
and don't be captivated by the siren song of the market. That only seduces you
into buying after stocks have soared and selling after they plunge.

9. "BUSINESS ADVENTURES :TWELVE CLASSIC TALES FROM THE WORLD OF WALL STREET" by John
BrooksBogle's "

The Clash of the Cultures" is another recommendation
from the 2012 shareholder letter.

Back in 1991, Bill
Gates asked Buffett what his favorite book was.To reply, Buffett
sent the Microsoft founder his personal copy of "Business
Adventures," a collection of New Yorker stories by John Brooks.Gates says that the
book serves as a reminder that the principles for building a winning business
stay constant. He writes: For one thing, there's an essential human
factor in every business endeavor. It doesn't matter if you have a perfect
product, production plan and marketing pitch; you'll still need the right
people to lead and implement those plans.The book has become a
media darling as of late; Slate wrote that it's "catnip for
billionaires."

Thursday, September 25, 2014

Arrow Coated Products is one stock I introduced to my readers through GTS -3 @ Rs.12 . Today stock hits its life time high @ Rs.225 .Stock already turned as a 17 bagger for investors with patience, within one year itself. Still recommending to Hold it .

Aimco Pesticides is one recent recommendation ( GTS -6) around Rs.40 . While recommending this stock , I mentioned about the promoter purchase up to a rate of Rs.35 .As per today's disclosure to stock exchange ,promoters again purchased shares even at a price of Rs.73 . I believe , it is an extremely positive development which indicating promoter's confidence about the future of their company. Still recommending to Hold it.

Monday, September 22, 2014

LA-OPALA RG initially recommended @ Rs.66 hits its life time high today @ Rs.1668.Company decided to split the face value of its shares from Rs.10 to Rs.2 . September 25, 2014 has been fixed as a Record Date for the purpose of Sub- Division.

Saturday, September 20, 2014

Recently
we discussed two stocks from different
verticals in packaging Industry. Polyplex from Polyester film based and Mold
Teck Packaging from IML packaging sector . This week let us look into another
company from a related sub sector – Metal packaging .Even though plastic packaging
is gaining more acceptance ,some products still need metal packaging due
tospecial characteristic of products to
be packed. Chemical reactions, keeping right nutritional
/ aesthetic values, requirement of extended shelf life ..etc compelling the
producers of certain products to prefer metal packaging.This situation ensures enough room for metal
packaging majors to grow though the chances for new entrants are bleak. At present, metal packaging commanding a 10 % market
share oftotal consumer packaging
market. In this background, let us look into Hindustan
Tin Works Ltd whichcommanding 20 % of
metal packaging market in India. HTWL manufacturing tin/metal cans and closures used in packaging of baby foods,
edible oils,paints, ghee, canned food items, fruit pulp,juice,protein powder, shoe polish etc. Company mastered in Aerosol cans and
Beverage Cans . Aerosol cans are mainly used to pack Deodorants, Room
Fresheners,Pesticides,paints and industrial products .Beverage cans are used to
pack Juices,Flavoured milk and other beverages.Longer shelf life without
refrigeration and leakage is an added advantage of beverage cans .Company’s
major consumers includes the who is who of FMCGand Food Industry like GSK consumer, Nestle, Britannia, Del-Monte Foods
, Asian Paints,Reebok ..etc.

Company
reported a top line of Rs.314 Cr , bottom line of Rs.8.5 Cr and an EPS of Rs.8
in last FY .Current book value of company is over Rs.100.Promoters holding 40 %
stake and world’s largest steel trading group Switzerland based Stemcor A G holding
another 10 % stake in this company.Now, management aggressively tapping emerging opportunities by
developing new products and entering into more overseas markets. The potential
of Indian food processing Industry , softening of metal prices,revival of
economies and company’s new initiatives are expected to drive the growth
momentum forward.This market leading can maker is currently trading with a
market cap of less than Rs.70 Cr and a P/E multiple of8 .Stock is currently trading 30 % discount
to its book value of Rs.100 . I
believe ,it is one good stock which listed only in BSE and CMP around Rs.70

Tuesday, September 16, 2014

This
stock recommended @ Rs.38 is currently
trading at its 52 week high @ Rs.526 .Stock already multiplied by 12 times in 11 months . Those with low risk appetite may sell 25 % of remaining holding and keep the rest .Link to Recommendation HERE

Saturday, September 13, 2014

Courtesy: Full credit of this wonderful article goes to the original author Mr.Ian Cassel--------------------------------------------------------------------------------------------------Extraordinary returns follow extraordinary discipline. Discipline in buying
and selling ,
and maybe the most important one of all, holding. Developing the conviction
to hold is something that I’ve learned over time. It didn’t come easy. The
basis of this article is to give some insight on how to develop the conviction
to hold your winners. It is very tempting to sell along the way, and it’s okay
to take a little off the table, but the big money is made by holding.

“It never was my thinking that made
the big money for me. It always was my sitting.” — Reminiscences of a Stock
Operator

Many of us, myself included, look at stocks that have made big moves and
think to ourselves, “If I would have only knew about that company and bought it
back then.” But would you really have developed the conviction to hold during
the run up? The problem is that to achieve a multi-bagger in the portfolio, you
have to hold a multi-bagger. And if you want it to change your life, you need
to hold a lot of it.

Don’t bother finding the next
multi-bagger if you aren’t going to develop the conviction to hold it.

Over the last decade, I’ve been lucky enough to be invested in a few stocks
that have gone up 5-10-20-30x over a multi-year time horizon. From my
experience, the only way to hold onto a big position after it makes a big move
is to know the underlying company better than anyone else. Greed and fear will
test your resolve, so you need to learn to keep these emotions in check. You
need to believe in your due diligence and form an unwavering conviction.

So how do you develop the
conviction to hold? A lot of due diligence is on the front-end of a buying decision, but
it certainly doesn’t stop there. The maintenance due diligence following the
buy decision is even more important. For me, I talk to management regularly and
keep close watch of all the ancillary forces and trends that are driving the
company’s business. My “edge” is knowing my positions better than anyone else.
This doesn’t mean I’m going to be right, but the more I know the better.I think many misperceive high conviction for close-mindedness, ignorance,
and arrogance. The conviction I’m talking about is quite the opposite. You need
to constantly assess your positions and openly listen to counter arguments.
Only then will you have the conviction to hold multi-baggers because you will
understand all sides to the story. You also need to develop a thick skin. If
you are not ready to be criticized for your convictions than you aren’t ready
to make real money.I believe most investors focus too much on selling strategies and not
enough time on knowing what they own. Selling strategies such as, “Sell
half after a stock doubles” or “When a position reaches 10% of the portfolio,
sell it down to 8%” are meant for lazy investors. These selling
metrics-formulas-strategies sound great in academia or when selling an
investment strategy to a bunch of lemmings who can’t think for themselves. The
truth is if you know what you own at all times, you’ll know when to sell.In many cases the stocks I’ve owned were better buys after they doubled then
when I initially bought them. In many cases when a position became 30% of my
portfolio there was a reason for it. The underlying business was doing
really well, or institutions were just starting to nibble on shares, so why
would I sell it. Just because a stock doubles, triples, etc, doesn’t mean it
should be sold. Stocks should be sold when your maintenance due diligence shows
something has changed. If you know the story better than anyone, you’ll likely
get clues well before the rest of the market. When a company performs, and
the story hasn’t changed, stop trying to change it. Enjoy the ride.When a stock goes on a multi-year run there will be long periods of time
when nothing happens. These are consolidation periods when old shareholders are
selling and new investors are buying inA big part of successful investing is becoming content doing nothing.
If you are in great companies, a lot of times your biggest risk is boredom.
Warren Buffett’s famous quote, “Our favorite holding period is forever”. If he
likes where the business is headed, he’ll continue to hold it and probably buy
more. Don’t be active for activity sake. Remember, there are no day traders on
the Forbes 400 list. Learn to be content holding and doing nothing.

“Patience is power.

Patience is not an absence of action;

rather it is “timing”

it waits on the right time to act,

for the right principles

and in the right way.”

– Fulton J. Sheen

As a microcap investor who invests in companies with little
to no institutional ownership, I want to hold for the institutional rally. When
a management continues to execute on a great story, at some point it’s going to
attract institutional inflows. You will see this when an illiquid stock all of
sudden gets propelled by a sustained period of above average volume. Hello
Institutions!

A multi-year run is made up of a bunch of mini-cycles that can last weeks or
months. During these times the stock can become undervalued or overvalued.
Quite a few professional investors I know like to trade 10-20% of their full
position during these swings. For my psyche I’ve found it to be counter
productive. If I own a $5 stock and think it might go back to $4 before it goes
to $10 in 12 months, I’m fine simply holding it through the mini-cycles.I hope I’ve helped shed some light on a hard but lucrative topic. Many
investors spend all their time trying to find great microcap companies only to
sell them after quick paltry gains. If management is executing and the story
hasn’t changed, hold on for the real money. Find great companies, develop the
conviction to hold them, and it will change your life.-----------------------------------------------------------------------------------